Stock control for trading and wholesale companies in Kuwait

Why wholesale stock drifts

Stock rarely goes wrong in one big event. It drifts: a delivery received into the wrong location, a carton entered as a piece, a transfer sent but never received, a damaged item thrown away without an adjustment. Each error is small, but together they make the stock report useless, and then people stop trusting it and start counting by hand. The answer is a few firm rules applied at every step.

Receiving: the first chance to get it right

• Receive against the order. Compare what arrived with the purchase order, and record shortages and damages at the door.
• Receive into the right location. Goods delivered to the warehouse belong to the warehouse until a transfer moves them.
• Use the supplier's unit. Enter the bill in cartons if the supplier invoices in cartons, with a conversion factor to the piece you sell, so cost per piece is right.
• Capture batches and expiry. For food, beverages, cosmetics and medicines, record batch numbers and expiry dates at receipt, not later.
• Account for free goods and discounts. Bonus quantities and bill discounts lower the true cost per unit, and the stock cost should show it.
• Return to the supplier properly. Damaged or short-dated goods sent back should leave stock on a supplier return linked to the bill, so the stock and the payable fall together.

Warehouse to branch

A transfer should have two ends: the warehouse dispatches and the branch receives. Until the branch confirms, the goods are in transit and belong to neither shelf. When the branch receives fewer than were sent, the difference is recorded and investigated, not quietly written off. Branches can ask for stock with a request, so the warehouse works from a list rather than from phone calls.

Review in-transit stock weekly. A transfer that has been "in transit" for a month is usually a transfer that was never received in the system.

Counting without stopping the business

A full annual count is still worth doing, but it should not be the only one. Cycle counts work better for most wholesalers:

1. Rank items by value and movement.
2. Count the top group every month, the middle group every quarter and the rest at least once a year.
3. Count by batch for expiry-tracked goods, so the batch quantities stay right as well as the total.
4. Post each adjustment with a reason code, such as damage, expiry, theft or receiving error.
5. Review the reasons monthly. Patterns point to process problems.

Expiry and slow stock

Sell the earliest expiry first, and review items approaching expiry early enough to act: return to supplier where the agreement allows, move to a branch that sells faster, or discount deliberately. Slow-moving stock deserves the same attention. A stock ageing report shows what has not moved, and is often a better guide to cash tied up than the stock value alone.

Reorder from data, not memory

Set a minimum level per item and location, review suggested reorders weekly, and check supplier lead times. Before reordering for one branch, look at whether another branch is overstocked. Demand forecasts help for seasonal lines, but a person should still approve the order.

The margin behind each sale

Wholesale margins are thin, so the cost behind each sale matters. With weighted average cost, every receipt updates the item's cost, and every sale carries the cost at that moment. Look at sales made below cost every week: they are either a pricing decision someone should have approved, or a cost entered wrongly on a bill.

Kuwait has no VAT at the time of writing, so the stock records serve your management, your auditor and your bank rather than a tax return. If VAT is introduced, clean item records will make it much easier to add a tax treatment to each item.

A weekly stock review

• Stock value by location, and the movement since last week.
• Transfers dispatched but not received.
• Adjustments posted, by reason.
• Items near expiry, and items that have not moved.
• Sales below cost.
• The reorder list, approved.

How NAQIX handles wholesale stock

NAQIX keeps stock per location for a company set up in KWD, with no VAT configured unless it applies. Purchase orders, goods received and supplier bills feed stock, items can be bought in boxes and stocked in pieces, and the stock cost on a bill reflects discounts and free goods. Valuation is at weighted average cost, and the inventory report and stock valuation can be read as of any past date.

Branches can request stock, and transfers carry approvals, dispatch, in-transit and partial receipt, with batches and serial numbers moving with the goods. Stock counts can be done by batch through Excel, and there are reorder alerts, demand forecasts, stock ageing and a stock movement summary for any period, by product and branch. Margin reports show the cost behind each sale.

The Inventory and Purchasing pages list the features, the multi-branch inventory overview shows the head-office view, and the NAQIX page for Kuwait describes the local setup.